A Constructive Heuristic for a Multi-Product Inventory Routing Problem

Inventory management and transportation issues are very important problems in distribution companies. Simultaneous l optimization of these problems realizes significant savings for all partners of the supply chain. One of the problems that should be addressed in the scope of simultaneous sl optimization is the inventory routing problem (IRP). IRP deals with how to manage the supply goods from one origin to several destinations during a finite or infinite time horizon while considering both transportation and inventory issues. Many researchers consider a single product in their model, but in many real life cases a situation in which multiple product considerations are either unavoidable or more economical, and they have to be coordinated with other inventory and vehicle routing decisions over a specific planning horizon. Therefore, in this research we consider the expansion of the single product inventory routing problem where multiple products are allowed. From a contributive point of view, we initially developed a mixed integer programming (MIP) model for a/the Multi-Product Inventory Routing Problem (MPIRP). Secondly, we design a constructive heuristic to solve the proposed model. We also evaluate the efficiency of the algorithm, comparing its results with lower and upper bounds obtained by the commercial software package CPLEX 11.0.